Commenting on the Company's fiscal 2016 second quarter results, Michael Pangia, President and CEO of Aviat Networks stated, "For the third consecutive quarter, we had positive operating cash flow and exited the quarter with approximately $40 million in cash and cash equivalents. Despite the revenue decline, our orders increased sequentially and we remain well positioned within our target markets. We are however, continuing to feel the headwinds from lower capital spending by our mobile operator customer-base. As a result, we continue to manage our cost structure, with expenses down approximately 23% year-over-year and see opportunities to lower fixed overhead further, while generating efficiencies throughout our global footprint. We are in the midst of various process
improvement programs and our focus remains on top-line stabilization and optimizing resources to continue to drive positive cash flow."

Pangia continued, "With our improving cash position, we have sufficient resources to execute our strategy while continuing to invest in our future. While we're taking a cautious approach in our top-line outlook, especially given market trends in the mobile operator space, our funnel continues to build with a number of opportunities which could boost performance as we move forward into fiscal 2017."

Fiscal 2016 Second Quarter Results Comparisons

The Company reported total revenues of $70.4 million as compared to $90.9 million in the corresponding year-ago period. The decline in revenues was primarily attributed to lower overall spending by the Company's mobile operator customer base and timing of certain project completions, which impacted revenues across the North America, Europe and Russia, and the Latin America and Asia Pacific regions. This was partially offset by higher revenues in Africa and the Middle East, as
revenues in this region increased $2.1 million or 9.7%.

Non-GAAP gross margins for the fiscal 2016 second quarter were 23.3% as compared to 26.4% in the fiscal 2015 second quarter, a decline of approximately 310 basis points. The gross margin decline was primarily due to product mix and reduced efficiencies related to lower revenue volumes. As a result, the Company was unable to absorb fixed organization costs, though this remained relatively flat for the comparable periods. The Company is in the process of instituting various initiatives to enhance product and services margins on a go-forward basis.

Non-GAAP total operating expenses for the fiscal 2016 second quarter were $21.0 million as compared to $27.2 million reported in the fiscal 2015 second quarter, a decline of $6.2 million or 22.8%. Lower operating expenses are primarily due to the various Process Improvement and Restructuring initiatives the Company has undertaken over the past year. Selling and administrative ("S&A") expenses declined by $4.9 million or 23.6%, primarily driven by lower professional fees, personnel and related expenses, bad debt expenses, and a decline in commissions as a result of lower revenue volumes. Additionally, research & development ("R&D") expenses declined by $1.3 million or 20.3%, primarily due to lower personnel and related costs and lower facility related costs, partially offset by an increase in product
development costs as the Company continues to focus on innovation and development of the next generation solutions for its global customer base.

Non-GAAP operating loss was $4.6 million for the fiscal 2016 second quarter as compared to an operating loss of $3.2 million for the comparable fiscal 2015 period. The Company reported a Non-GAAP net loss attributable to Aviat Networks of $5.1 million or a loss of $0.08 per diluted share as compared to a Non-GAAP net loss attributable to Aviat Networks of $3.8 million or a net loss per diluted share of $0.06 for the comparable fiscal 2015 period.

Adjusted EBITDA for the fiscal 2016 second quarter was $(3.0) million, compared with $(1.2) million in the year ago quarter. In addition to the $0.4 million of share-based compensation expense excluded from non-GAAP loss from continuing operations, Adjusted EBITDA also excluded $1.8 million of pre-tax charges primarily comprised of depreciation and amortization on property, plant and equipment.

Cash and cash equivalents were $39.5 million as of January 1, 2016 as compared to $34.7 million as of July 3, 2015, an improvement of $4.8 million. Cash and cash equivalents also improved by $3.7 million sequentially. The Company continues to focus on cash generation from operations and has plans in place to drive free cash flow improvements over the coming year.

A reconciliation of GAAP to non-GAAP financial measures for the second quarter fiscal 2016 along with the accompanying notes is provided on Table 4 below.

Conference Call Details

Aviat Networks will host a conference call at 9:00 a.m. Eastern Time (ET) on February 11, 2016 to discuss its financial results for the second quarter and six months of fiscal 2016. To listen to the live conference call, please dial toll free 888-632-3384 or 785-424-1675, access code 7480259, by 8:50 a.m. ET. Investors are invited to listen via webcast, which will be broadcast live and via replay approximately two hours after the call at http://investors.aviatnetworks.com/events.cfm.

Non-GAAP Measures and Comparative Financial Information

Aviat Networks, Inc. reports information in accordance with U.S. Generally Accepted Accounting Principles ("GAAP"). Management of Aviat Networks monitors gross margin, research and development expenses, selling and administrative expenses, operating loss, income tax provision, loss from continuing operations, basic and diluted net loss per share from continuing operations, adjusted earnings (losses) before interest, tax, depreciation and amortization ("Adjusted EBITDA") adjusted to exclude certain costs, charges, gains and losses, on a non-GAAP basis for planning and forecasting results in future periods, and may use these measures for some management compensation purposes. These measures exclude certain costs, expenses,
gains and losses as shown on the attached Reconciliation of Non-GAAP Financial Measures table (table 4). As a result, management is presenting these non-GAAP measures in addition to results reported in accordance with GAAP to better communicate underlying operational and financial performance in each period. Management believes these non-GAAP measures provide information that is useful to investors in understanding period-over-period operating results separate and apart from items that may, or could, have a disproportionate positive or negative impact on results in any given period. Management also believes that these non-GAAP measures enhance the ability of an investor to analyze trends in Aviat Networks' business and to better understand our performance. Aviat Networks'
management does not, nor does it suggest that investors should, consider such non-GAAP financial measures in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. Aviat Networks presents these non-GAAP financial measures in reporting its financial results to provide investors with an additional tool to evaluate its financial performance. Reconciliations of these non-GAAP financial measures with the most directly comparable financial measures calculated in accordance with GAAP are included in the tables below.

About Aviat Networks

Aviat Networks, Inc. (NASDAQ: AVNW) is a leading global provider of microwave networking solutions transforming communications networks to handle the exploding growth of IP-centric, multi-Gigabit data services. With more than one million systems sold over 140 countries, Aviat Networks provides LTE-proven microwave networking solutions to mobile operators, including some of the largest and most advanced 4G/LTE networks in the world. Public safety, utility, government and defense organizations also trust Aviat Networks' solutions for their mission-critical applications where reliability is paramount. In conjunction with its networking solutions, Aviat Networks
provides a comprehensive suite of localized professional and support services enabling customers to effectively and seamlessly migrate to next generation Carrier Ethernet/IP networks. For more than 50 years, customers have relied on Aviat Networks' high performance and scalable solutions to help them maximize their investments and solve their most challenging network problems. Headquartered in Santa Clara, California, Aviat Networks operates in more than 100 countries around the world. For more information, visit www.aviatnetworks.com or connect with Aviat Networks on Twitter, Facebook and LinkedIn.

Forward-Looking Statements

The information contained in this document includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 21E of the Securities Exchange Act and Section 27A of the Securities Act including Aviat Networks' beliefs and expectations regarding market positioning, process improvement programs, potential for growth in adjacent markets, ability to drive positive cash flow, increase in the funnel and opportunities for improved performance in the second half of the year and into fiscal 2017. All statements, trend analyses and other information contained herein about the markets for the services and products of Aviat Networks and trends in revenue, as well as other statements identified by the use of forward-looking terminology,
including "anticipate," "believe," "plan," "estimate," "expect," "goal," "will," "see," "continue," "delivering," "view," and "intend," or the negative of these terms or other similar expressions, constitute forward-looking statements. These forward-looking statements are based on estimates reflecting the current beliefs of the senior management of Aviat Networks. These forward-looking statements involve a number of risks and uncertainties that could cause actual results to differ materially from those suggested by the forward-looking statements. Forward-looking statements should therefore be considered in light of various important factors, including those set forth in this document. Important factors that could cause actual results to differ materially from estimates or projections contained in the forward-looking statements include
the following:

the possible delisting of our stock from the Nasdaq Stock Market;

material weaknesses identified in our system of internal control and associated remediation efforts and investments and other actions needed to remedy those material weaknesses;

continued price and margin erosion as a result of increased competition in the microwave transmission industry;

the impact of the volume, timing and customer, product and geographic mix of our product orders;

the impact of political turmoil in countries where we have significant business.

For more information regarding the risks and uncertainties for our business, see "Risk Factors" in our Form 10-K filed with the U.S. Securities and Exchange Commission ("SEC") on September 30, 2015 as well as other reports filed by Aviat Networks, Inc. with the SEC from time to time. Aviat Networks undertakes no obligation to update publicly any forward-looking statement for any reason, except as required by law, even as new information becomes available or other events occur in the future.

To supplement the consolidated financial statements presented in accordance with accounting principles generally accepted in the United States ("GAAP"), we provide additional measures of gross margin, research and development expenses, selling and administrative expenses, operating loss, income tax provision, loss from continuing operations attributable to Aviat Networks, basic and diluted net loss per share from continuing operations attributable to Aviat Networks, and adjusted earnings before interest, tax, depreciation and amortization ("Adjusted EBITDA") attributable to Aviat Networks, adjusted to exclude certain costs, charges, gains and losses, as set forth below. We
believe that these non-GAAP financial measures, when considered together with the GAAP financial measures provide information that is useful to investors in understanding period-over-period operating results separate and apart from items that may, or could, have a disproportionate positive or negative impact on results in any particular period. We also believe these non-GAAP measures enhance the ability of investors to analyze trends in our business and to understand our performance. In addition, we may utilize non-GAAP financial measures as a guide in our forecasting, budgeting and long-term planning process and to measure operating performance for some management compensation purposes. Any analysis of non-GAAP financial measures should be used only in conjunction with results presented in accordance with GAAP. Reconciliations of these non-GAAP financial measures with the most directly
comparable financial measures calculated in accordance with GAAP follow.

Basic and diluted shares used in computing loss per share from continuing operations

GAAP

62.8

62.1

62.6

62.1

Non-GAAP

62.8

62.1

62.6

62.1

ADJUSTED EBITDA:

GAAP loss from continuing operations attributable to Aviat Networks

$

(5.7)

(8.1)%

$

(4.4)

(4.8)%

$

(7.2)

(4.8)%

$

(10.1)

(5.8)

%

Depreciation and amortization of property, plant and equipment

1.7

1.9

3.4

3.5

Interest expense

0.1

0.2

0.1

0.3

Share-based compensation

0.4

0.4

0.9

1.0

Amortization of intangible assets

—

0.1

—

0.2

Restructuring charges

—

—

—

1.5

Provision for income taxes

0.5

0.6

0.5

0.9

Adjusted EBITDA attributable to Aviat Networks

$

(3.0)

(4.3)%

$

(1.2)

(1.3)%

$

(2.3)

(1.5)%

$

(2.7)

(1.6)

%

_____________________________________________________

(1) The adjustments above reconcile our GAAP financial results to the non-GAAP financial measures used by us. Our non-GAAP loss from continuing operations attributable to Aviat Networks excluded share-based compensation, amortization of intangible assets, restructuring charges and adjustment to reflect the pro forma tax rate. Adjusted EBITDA was determined by excluding depreciation and amortization on property, plant and equipment, interest expense, provision for income taxes, and non-GAAP pre-tax adjustments, as set forth above, from the GAAP loss from continuing operations attributable to Aviat Networks. We believe that the presentation of these non-GAAP items provides meaningful supplemental information to investors, when viewed in conjunction with, and not in
lieu of, our GAAP results. However, the non-GAAP financial measures have not been prepared under a comprehensive set of accounting rules or principles. Non-GAAP information should not be considered in isolation from, or as a substitute for, information prepared in accordance with GAAP. Moreover, there are material limitations associated with the use of non-GAAP financial measures.